Although Sears operated 425 stores when Eddie Lampert’s holding company acquired the retailer out of bankruptcy in February for $5.2 billion, it appears the company’s brick-and-mortar footprint will soon be stripped down to less than half that. After being set to close roughly 100 of the remaining Sears and Kmart stores by the holiday season, the holding company, Transform Holdco, will shutter yet another 96 before February 2020, leaving just 182 locations remaining.
Transform Holdco said in a statement that it had secured approximately $250 million in new financing from Lampert and hedge fund Cyrus Capital Partners LP, among other lenders, Reuters reported. The company said it would continue to evaluate its retail footprint, suggesting that additional closures are possible.
For this latest round of closures, going out of business sales are expected to begin on Dec. 2. The company noted that all eligible store workers will be offered the same number of weeks of severance as offered to employees prior to the bankruptcy filing.
The closures are likely to fuel the ongoing criticisms of Lampert, the former CEO of Sears, who argued upon leading the $5.2 billion lifeline deal that it would preserve 45,000 jobs and prevent liquidation. Lampert and his holding company remain mired in litigation with Sears’ old bankruptcy estate over terms related to the rescue deal.
When the $11.4 billion Kmart-Sears acquisition took place in 2005, the combined retailers had a footprint of approximately 3,500 stores when they merged. But after more than $10 billion in losses over nearly 15 years and a Chapter 11 bankruptcy, the company appears to on an inevitable path toward extinction.
In addition to the store closures, Transform Holdco has made efforts in recent months to sell off Sears assets. Transform Holdco has shopped around its Die Hard brand and other potential assets, having already sold off the Sears Hometown and Outlet Stores unit to Liberty Tax for $132.9 million in August. In 2017, Sears sold off its Craftsman tools brand to Black & Decker for $900 million.